- USD/JPY remains limited despite US dollar strength as Wall Street turns negative.
- Yen gains amid risk aversion and steady to lower US yields.
The USD/JPY pair dropped to 112.37 after the beginning of the American session moving further away from the daily highs (112.73) and the weekly top (112.87). The bullish momentum eased amid a slide in equity prices in Wall Street.
The Dow Jones Index opened in positive territory and failed to hold and it was falling 0.82% and the S&P 500 was down 1.35%. Risk aversion also favored the demand for US bonds. The 10-year yield was at 3.12%, near the weekly low.
The greenback and the yen were among the top performers. The US Dollar Index rose to its highest level in two months at 96.52 and was consolidating most of the day’s gains. US data came in mixed. While new home sales dropped 5.5% (against -1.4% of market consensus), both PMI (service and manufacturing) came in above expectations.
USD/JPY Levels to watch
To the downside support levels might be located at 112.30 (daily low), 111.95 (Oct 18, 23 low) and 111.80. On the upside, resistance could be seen at 112.60, 112.85/90 (Oct 22 high) and 113.30 (Oct 10 high).